Govt restricts export of wheat flour to curb its rising prices

New Delhi, August 25

Advertisement

In a major decision, the government today decided to put restrictions on the export of wheat flour to curb its rising prices. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi.

Dip in production

• Wheat prices in both wholesale and retail markets have also come under pressure due to a nearly 3 per cent drop in the domestic output to 106.84 million tonne in the 2021-22 crop year
• Its production is estimated to have declined due to heatwave that resulted in shrivelled grain in Punjab and Haryana
• Industry body Roller Flour Millers’ Federation has raised concerns regarding unavailability of wheat and the rise in prices in the last few days

“The CCEA has approved the proposal for amendment to the policy of exemption for wheat or meslin flour (HS Code 1101) from export restrictions/ban. The approval will now allow to put restriction on the export of wheat flour, which will ensure a curb on rising prices and ensure food security of the most vulnerable sections of society,” an official statement said.

The Directorate General of Foreign Trade will issue a notification to this effect.

Russia and Ukraine are the major exporters of wheat, accounting for around one-fourth of the global wheat trade. The war between the two countries has led to global wheat supply chain disruptions, thus increasing the demand for Indian wheat. As a result, the price of wheat in the domestic market has showed an increase, as per the statement.

“In order to ensure food security in the country, the government prohibited export of wheat in May. However, this caused a jump in overseas demand for wheat flour. Wheat flour exports from India have registered a growth of 200 per cent during the April-July period this year as compared to the corresponding period in 2021.

“The increased demand for wheat flour in the international market led to significant price rise of the commodity in the domestic market. Earlier, there was a policy not to prohibit or put any restrictions on the export of wheat flour. Therefore, a partial modification of the policy was required by withdrawing the exemption from ban/restrictions on export for wheat flour in order to ensure food security and put a check on its mounting prices,” the statement added.